An eligible employer is:
- A Canadian-controlled private corporation (CCPC), a non-profit organization, or a registered charity.
- Had an existing payroll account with the CRA on March 18, 2020.
- Pays wages, bonuses, and other remuneration (including taxable benefits) to employees.
A CCPC is eligible if they are eligible for the $500,000 small business deduction. Their taxable capital for the prior year would need to be less than $15 million (including all associated companies).
Eligible employers do not include partnerships or sole-proprietors.
The Subsidy is equal to 10% of the remuneration you pay between March 18, 2020 and June 20, 2020. The maximum Subsidy is $1,375 per employee to a maximum of $25,000 per employer.
Associated CCPCs are not required to share the maximum Subsidy of $25,000 per employer.
The Subsidy only applies to reduce federal or provincial income (except Quebec) tax withholding. It does not apply to CPP and EI premiums.
How to “Claim” Subsidy
You can claim the Subsidy by reducing your next remittance of payroll that includes the period of March 18th to June 20th. If you are a regular (monthly) remitter, then next remittance you can reduce is due on April 15th.
If you are using a payroll provider (i.e. ADP or Ceridan), they may have their own process to claim the Subsidy. We would encourage those employers to talk to their payroll provider.
If you process your payroll manually, you will need to manually calculate your Subsidy before remitting.
The CRA is updating their reporting requirements. More information will be announced by the CRA on how to report in the future. As the first expected remittance deadline for the period is March 28th for accelerated remitters, we expect the CRA will have this information released soon.
An Eligible Employer had an employee being paid $3,000 semi-monthly for the period between March 16th to 31st. Based on this, the Employer would calculate the wages (as normal):
* Subsidy is calculated as $3,000 x 10% = $300
Note: As above, you are subject to a per employee subsidy maximum of $1,375 and a total employer subsidy maximum of $25,000.
If you have any questions about the information outlined above, please reach out to our team at email@example.com
We will continue to keep you updated as things unfold.